Chapter 1.6: The European Challenge in Videogame Software: The French Touch and the Britsoft Paradox

Overview

Philippe Larrue, William Lazonick, and Mary O'Sullivan

INSEAD (The European Institute of Business Administration)

Corresponding author: <[e-mail]>

In the year 2001, the French publisher, Titus Interactive, acquired a controlling share in the U.S.-based company Interplay. At the time of the acquisition, Interplay was one of the best-known PC games developers and publishers, with 1998 sales of over $115 million, a solid game development base of five in-house studios, and about 50 titles in the pipeline for the year 1999/2000. Titus was about the same size as Interplay at the time of the acquisition and the fourth-largest publisher in France.

During the 1996 to 2001 industry cycle, a number of French publishers experienced rapid growth, both internal and through acquisitions, that permitted the French industry to take third place in global revenues after Japan and the United States. Pushed back to fourth place was the British industry, notwithstanding the facts that the British have a larger home market for videogames than the French and a much more extensive and successful developer base.

In a recently released report on "creative industries," the UK Department of Media, Culture and Art has acknowledged the existence of what is now being called the "Britsoft paradox" [UKMedia01]. In an industry in which "everything comes down to games," why didn't the "Britsoft" advantage translate into the rapid growth that the French achieved? And how sustainable is the French competitive advantage in publishing? Our ongoing research on the European videogame industry will hopefully provide some robust answers to these questions as the next cycle of the industry unfolds. As a prelude, in this short article, we survey the competitive strategies of some of the major British and French players in the last cycle.